Let’s Rethink the Role of Manufacturing in Climate-Change Policies

An employee works on an assembly line producing Mercedes-Benz cars at a factory of Beijing Benz Automotive Co. (BBAC) in Beijing in August.

KIM KYUNG-HOON/REUTERS

KATE GORDON: In the days leading up to China’s recent Victory Day parade through Beijing streets, the city’s officials temporarily shut down factories and ordered cars off the road to try to limit smog (it worked; the parade day dawned under blue skies). Neighboring Hebei province, one of the largest steel-producing regions of the world, has gone even further, pledging to move 5 million tons of steel and cement production capacity overseas by 2017 to help address the area’s air quality problems.

Shutting down or moving manufacturing may work to clean up the air. But what about the climate? Carbon emissions moved overseas don’t respect national or regional boundaries—instead, they stay in the atmosphere for hundreds of years, causing severe economic impacts across the globe. Shuttering manufacturing plants forever does limit emissions, but has the pesky byproduct of ending society’s ability to produce industrial goods.

So what role should heavy manufacturing play in a low-carbon economic future? This is an issue often ignored by environmental groups as they paint a picture of that future. The fact is that a truly sustainable economic future, one that addresses air quality and climate change and economic growth, must include heavy manufacturing. We need steel for wind turbines and biofuel refining operations. We need aluminum for solar mounting systems, and cement to lay the foundation for green buildings.

Rather than temporarily closing or permanently relocating manufacturing facilities, city planners and economic developers should work with companies to institute process efficiency measures to make manufacturing as clean and efficient as possible, even as those same heavy industries gear up to produce the low-carbon technologies of the future.

As my Paulson Institute colleagues and I recently pointed out, China’s Beijing-Tianjin-Hebei region, also known as “Jing-Jin-Ji,” is particularly well-suited to take on this challenge: China has made several very public national commitments to clean up its air and address global climate change, giving its capital city the political cover to move ahead and get this done. At the same time, the Jing-Jin-Ji area has stated its intention to develop a truly regional economic development strategy, meaning that simply moving high-emitting factories from place to place within the region to bring down short-term pollution is no longer an option.

Top of the region’s to-do list should be industrial efficiency measures in the iron and steel sectors, which dominate large parts of the Jing-Jin-Ji. Second should be encouraging those industries to anchor emerging clean energy and technology clusters, which will begin to satisfy the growing demand for these products in China. And of course, addressing overcapacity in these sectors is also important, as China moves to a more service-based economy. But shuttering factories can’t be the only answer.

At the end of the day, our world economy won’t be truly sustainable—environmentally or fiscally—without a functional manufacturing sector. It is time to make sure these industries are a key part of the solution, instead of going after them as the main cause of the problem.